Home business

[Ray Miller]

Ditto Mike's comments. It sounds like a non issue, unless of course you're the zoning police

What if a reviewer gets a hold of it and wants to dismantle the appraisal report????

 

[Joshua Fookes]

Disclose what you see. Let the client make the informed decision on the collateral.

Possible verbiage:
"Subject property is being used as a single family residence though it has yard signs indicating the presence of a home based business. This does/does not negatively affect the marketability or market value of the subject property"

If there is a salon style sink in the house (bedroom/living room etc), would most buyers want that out of there? If so, then you have a cost to cure the functional obsolescence that should be considered.

Josh

 

[Joshua Fookes]

But .. many lenders will not loan if there's a bidnez use .. had one refuse to continue as the HO was detailing cars in his garage ..

Thus the need to tell them what is going on there. You don't want to "look the other way" to mislead the lender (commit fraud) and push the loan through.

Josh

 

[Bamba]

Disclose what you see. Let the client make the informed decision on the collateral.

Possible verbiage:
"Subject property is being used as a single family residence though it has yard signs indicating the presence of a home based business. This does/does not negatively affect the marketability or market value of the subject property"

If there is a salon style sink in the house (bedroom/living room etc), would most buyers want that out of there? If so, then you have a cost to cure the functional obsolescence that should be considered.

Josh

There is no salon style sink...there is a separate half bath and she is using that sink...the room used for the salon could be used as a den/office...if she takes the chair and whatever she has in there it will just be an empty room that could be used for anything...she didn't do anything to alter the room...

 

[Bamba]

If the HO were to move out, would any damage be caused by removing the items used to conduct this business ? I would disclose this in the report and talk about percieved marketability issues ( if any) and include a photo or two to show what is going on there.

Mr. Rex asked if the Residential zoning allows home based businesses. Well don't we appraisers who work from home have a home based business ? I seriously doubt we have all notified the zoning dept about our doing appraisal work from one of the extra bedrooms.

No, there would be no damage if they were to remove all items that pertain to the business.

That was exactly my thought....I have a home business but I do not consider that it affects the marketability of my home...once I leave this house, it will be just another empty room...

 

[Pat Butler]

The zoning where I live distinguishes between an home based business (illegal) and a home occupation (legal) like appraising, insurance, and activities where the house is used for an office with only incidental customer traffic and no outside signage.